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EMC Corp (NYSE:EMC)
Beneish M-Score
-2.70 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

EMC Corp has a M-score of -2.70 suggests that the company is not a manipulator.

EMC' s 10-Year Beneish M-Score Range
Min: -3.63   Max: -1.99
Current: -2.7

-3.63
-1.99

During the past 13 years, the highest Beneish M-Score of EMC Corp was -1.99. The lowest was -3.63. And the median was -2.70.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of EMC Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.086+0.528 * 0.9989+0.404 * 1.0507+0.892 * 1.0525+0.115 * 0.9778
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0337+4.679 * -0.0775-0.327 * 0.9941
=-2.70

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $4,413 Mil.
Revenue was 7049 + 6032 + 5880 + 5479 = $24,440 Mil.
Gross Profit was 4505 + 3743 + 3654 + 3347 = $15,249 Mil.
Total Current Assets was $15,733 Mil.
Total Assets was $45,885 Mil.
Property, Plant and Equipment(Net PPE) was $3,766 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,864 Mil.
Selling, General & Admin. Expense(SGA) was $7,982 Mil.
Total Current Liabilities was $11,710 Mil.
Long-Term Debt was $5,495 Mil.
Net Income was 1146 + 587 + 589 + 392 = $2,714 Mil.
Non Operating Income was -106 + -74 + -31 + -40 = $-251 Mil.
Cash Flow from Operations was 2231 + 1700 + 1254 + 1338 = $6,523 Mil.
Accounts Receivable was $3,861 Mil.
Revenue was 6682 + 5539 + 5614 + 5387 = $23,222 Mil.
Gross Profit was 4224 + 3442 + 3509 + 3298 = $14,473 Mil.
Total Current Assets was $17,278 Mil.
Total Assets was $45,849 Mil.
Property, Plant and Equipment(Net PPE) was $3,478 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,665 Mil.
Selling, General & Admin. Expense(SGA) was $7,337 Mil.
Total Current Liabilities was $11,799 Mil.
Long-Term Debt was $5,494 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(4413 / 24440) / (3861 / 23222)
=0.18056465 / 0.16626475
=1.086

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3743 / 23222) / (4505 / 24440)
=0.6232452 / 0.62393617
=0.9989

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (15733 + 3766) / 45885) / (1 - (17278 + 3478) / 45849)
=0.57504631 / 0.54729656
=1.0507

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24440 / 23222
=1.0525

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1665 / (1665 + 3478)) / (1864 / (1864 + 3766))
=0.32374101 / 0.33108348
=0.9778

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(7982 / 24440) / (7337 / 23222)
=0.32659574 / 0.31595039
=1.0337

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5495 + 11710) / 45885) / ((5494 + 11799) / 45849)
=0.37495914 / 0.37717289
=0.9941

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(2714 - -251 - 6523) / 45885
=-0.0775

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

EMC Corp has a M-score of -2.70 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

EMC Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.02971.0431.14970.86820.99281.00450.97221.07681.05161.086
GMI 0.95311.01370.97250.98611.0010.93660.96930.96841.00770.9989
AQI 0.86181.06980.83831.01811.13871.14640.96271.03850.91131.0507
SGI 1.17431.15431.1861.12440.94281.21311.17591.08531.06941.0525
DEPI 1.03191.06790.91550.92490.99051.03020.94551.02181.010.9778
SGAI 0.9791.08151.01411.04591.05920.96421.02510.9960.97971.0336
LVGI 1.13461.69210.92060.97520.89460.98871.00110.88881.39360.9941
TATA -0.0752-0.0608-0.0832-0.0943-0.0839-0.0846-0.0886-0.0878-0.0824-0.0775
M-score -2.77-2.78-2.63-2.94-2.85-2.64-2.81-2.71-2.91-2.70

EMC Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.07690.97411.01230.87341.05161.01060.98741.01781.0860.944
GMI 0.96830.97740.99320.99661.00781.00841.00781.00750.99891.0043
AQI 1.03851.03290.89390.90510.91130.99131.12241.07841.05071.0447
SGI 1.08531.07381.06441.06171.06951.05941.0571.06661.05251.054
DEPI 1.02181.01921.02621.0341.011.01180.99040.96940.97780.9671
SGAI 0.99610.99210.98950.99180.97950.99851.02111.02141.03371.0364
LVGI 0.88880.98841.35961.36541.39361.29020.9590.95260.99411.0939
TATA -0.0863-0.0864-0.0737-0.0823-0.0824-0.0817-0.084-0.0798-0.0775-0.0812
M-score -2.70-2.83-2.92-3.08-2.91-2.89-2.77-2.73-2.70-2.88
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